SEC Clarifies New Rules on Executive Pay

The U.S. Securities and Exchange Commission has clarified what data companies can use to comply with its new rule requiring disclosure of the relationship between executive pay and performance.

The pay-for-performance proposal is part of the Dodd-Frank law’s disclosure package involving executive pay. It requires, among other things, that public companies disclose the ratio of the CEO’s annual total compensation to the median annual total compensation of all other employees.

In a recent compliance update, the SEC’s Division of Corporation Finance said registrants can use any reasonable “consistently applied compensation measure” (CACM) to identify the annual compensation of employees. Read More